Trend is Still Up...Breakout or Pull Back? AAPL New High Close...

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Six of nine sectors moved lower on Monday.  XLU, XLP and XLK were the strongest sectors.

Breadth weakened as decliners led advancers 1.19 to 1 on the NYSE and 1.31 to 1 on the NASDAQ.

Exchange        NYSE       NASDAQ

Advancers       1,368          1,088

Decliners         1,629          1,432

Monday, was a typical pause at resistance and buyers and sellers battle it out.  As I mentioned in this evening’s webcast sellers were in control for two and a half hours when the buyers took control and closed the index near the open.  The SPY moved moved up 1 cent on 103.9 million shares

AAPL made a New High Close at 552.

                 

Money Flow

Euro       +35 pips   1.3155

TNX        -0.07          20.38

TLT         -0.02        115.95

XLF        -0.04          14.85

SPX       +0.22     1,371.09

VIX         -1.47          15.64

INDU +0.29%

SPX +0.02%

NDX +0.00%

COMPQ -0.16%

RUT -0.33%

Money Flow was mixed on Monday as most assets were in a trading range.   The Euro and SPX moved slightly higher while TNX, TLT and XLF moved slightly lower.

The VIX moved lower and made its lowest close since May 31, 2011.

The Jan 18 SPX breakout has an intermediate term chart target of 1,427 within 12 weeks of the breakout.

(click image to enlarge)

 

Breakout or pullback?  For the SPX to break out, it will most likely need the help of the Euro to continue its support bounce, XLF to break out and interest rates to rise.  If the Euro breaks support and interest rates fall and XLF pulls back a SPX pull back into last week’s trading range becomes more likely.

With the SPY at horizontal resistance many stocks are in a Horizontal Breakout Setup: SPY, TPX, LULU, WDC, SINA, CTXS, TIBX, JBL, VRSN, QCOM.

(click image to enlarge)

Leading stocks > +2% on Monday included TSLA, RCL, IL

Losing stocks < -2.0% included LDK, PCX, ANR, WLT, SINA, PCS, MCP, CDE, CREE, ARUN, TSL, CIEN, AKS, STI, SLB, ICE, ESI, A, POT

NDX 100 stocks stronger than the NDX included ALXN, WCRX, CTXS, AAPL, VRSN, EXPE, MRVL, ROST, CA and CHKP.

Stocks weaker than the NDX include FSLR, GMCR, RIMM, SHLD, MU, NFLX, EA, STX, NVDA and LIFE.

One NDX stock VRSN closed above the 30 DMA and three AMZN, MU and VMED moved below leaving 68 NDX stocks above their 30 DMA.

Stocks to Watch on Tuesday

Holding Above 30 DMA = 41

CMG, NKE, CRUS, SWKS, NGLS, CHL, TPX, HLF, LNKD, LVS, CSTR, CRM, INFA, SWI, VMW, IBM, TSLA, GES, V, ICE, TIF, UCO, DLR, SNDK, SINA, ANF, BAC, C, COH, FAS, GS, NTES, SWK, VECO, ZION, CREE, DHR, TBT, WDC, FFIV, MCP

Moving Above 30 DMA = 2

GLW, URE

Moving Below 30 DMA = 11

A, ARUN, DOW, F, JDSU, KKD, NDAQ, PCS, STI, SWN, ZAGG

Staying Below 30 DMA

CF, FAZ, TLT, RVBD, CAT, CROX, MOS, POT, SLW, CDE, LDK, SLB, SMH, ENTR, HAL, JNPR, UNP, ESI, IL, NVDA, CIEN, DECK, TSL, HUM, RCL, UAL, WLT, DE, CLF, FCX, X, GRPN, ANR, PCX, SOHU, AKS, ATI

Five Month Intermediate Term Market Trend: Up

Short Term Market Trend: Up


Here are the details on the strategy I mentioned this evening.
Short-term Reversal Trading Strategy (Oct 25, 2008)
This strategy may not be appropriate for non-technical traders and only traders who can assume the risk of trading against the prior trend should consider trading this technique. Anyone who finds this strategy of interest should first backtest and papertrade it on stocks they trade to verify the strategy's appropriateness for them. Chart Signals and Dave Johnson offer these guidelines only as an illustration of how technical indicators can be combined into a set of rules for a trend reversal strategy and make no representations regarding the profitability or completeness of the following guidelines and are not liable for any losses traders may incur. Individuals traders assume all liability for any losses they may incur.  

Short-term Reversal Trading Strategy Overview The objective of this short term trading system is to identify high probability reversal points by combining potential double bottom or slightly lower low or a double top or slightly higher high chart patterns with short term candlestick reversal patterns and a negative/positive divergence in the stochastic indicator (14/5 setting). An eight day MA is included primarily as an exit/trailing stop indicator, but also gives the user a smoothed view of the short term trend. 
Rules Setup Entry:  
1 - There must be a double bottom or slightly lower low chart pattern for an upside reversal. For downside reversal there must be a double top or slightly higher high chart pattern. 
2 - There must be a bottom/top candlestick reversal pattern present on the second high. 
3 - There must be a positive divergence for an upside reversal and a negative divergence for a downside reversal in the stochastic indicator.  
Entry Signal: Buy on confirmation of the candlestick pattern. Exit:  
4 - Initial stop loss is set 20 cents below the low of the candle pattern for an upside reversal and 20 cents above the high of the candle pattern for a downside reversal. 
5 - Once the trade produces a profit of $1.00, stop loss is moved to breakeven (the entry price).
6 - Once the eight day MA moves past the breakeven point the eight day MA becomes the trailing stop. The trailing stop is the Target Price.
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